OFPP: Best value works for A-76

By Jason Miller

Apr 25, 2006

WILLIAMSBURG, Va.'The Office of Federal Procurement Policy is trying to convince lawmakers of the benefits of using best value'rather than just lowest price'for competing inherently commercial jobs with the private sector under Office of Management and Budget Circular A-76.

Officials say that, by their latest calculations, agencies can save an average of $68,000 per position competed when using best value'roughly three times the overall average of $23,000 per position when best value is not used.

But if they cannot convince Congress, more agencies could end up like the Energy Department, officials said.

Congress put a provision in Energy's appropriations bill that would not let the department use a best-value, low-cost, trade-off methodology, Dennis O'Brien, director of Energy's Competitive Sourcing and A-76 Office said yesterday at the Interagency Resources Management Conference.

The best-value approach, which Energy would prefer to use, is when agencies consider not just the lowest overall price but what the overall best deal would be, considering technology, terms, conditions and price.

As a result, Energy likely will improvise, using a two-step process to conduct its next competitive sourcing competitions later this year, O'Brien said. Department officials plan to look at the offerers' past performance, technical know-how, small business contracting plan and other things before considering cost. Energy officials then will consider overall price after eliminating those offerers who don't meet a minimum set of requirements, O'Brien said.

Part of OFPP's effort to convince Capitol Hill includes a separate report to lawmakers detailing the benefits of best value, officials said. The report went to Congress along with the Competitive Sourcing results report last week.

Matthew Blum, associate administrator for competitive sourcing at OMB, said the report is trying to get information out and illustrate what the agencies are accomplishing.

'You have to pick the right program,' O'Brien said. 'Then you have to have management commitment and have an executive steering committee who will make all the decisions.' Energy was an early adopter of best value, O'Brien added, and has seen some success.

Joann Kansier, a director for Grant Thornton LLP of Alexandra, Va., said not being able to use best value also hurts the government because neither the agency nor the private-sector bid is concerned about providing the best solution to the problem. 'Everyone is thinking about how to be the cheapest,' Kansier said. 'No one thinks about capital investment.'

Energy also did a best-value competition by using the General Services Administration's Federal Supply Service schedule for a logistics management competition and received six bids, O'Brien said.

It was awarded to a contractor, but was protested and re-evaluated. O'Brien said it should be awarded again in the next few weeks.